German market gears up for T2S

Source: Clearstream

Results of a survey conducted at a Clearstream conference on TARGET2-Securities (T2S) in Frankfurt revealed that the German market is optimistic about the future pan-European settlement platform of the European Central Bank (ECB).

56.6 percent of the 130-plus attendees - representing banks and financial service providers as well as securities settlement experts from the German market - believe T2S offers "an opportunity and totally new business opportunities"; 23.2 percent of attendees see "neither advantages nor disadvantages" in T2S; only one in five attendees (20.2 percent) regards T2S as "a risk that increases pressure on the market". In all polls, participants were only allowed to choose one response.

The success of TARGET2-Securities (T2S) is heavily dependent not only on the progress of preparations by participating central securities depositories but also their clients as the T2S start date in 2015 approaches. According to another poll, more than 79.6 percent of attendees are well on track with their preparations for T2S: 55.9 percent responded that they were "on schedule" with their preparations, while 23.7 percent of participants said their preparations were "behind schedule, but under control". Only a small number of participants said they were "uncertain" whether preparations would be concluded on time (4.3 percent). On the other hand, 16.1 percent of participants indicated that their preparations for T2S had not yet begun.

Stefan Lepp, Chief Executive Officer of the German central securities depository Clearstream Banking AG, said: "TARGET2-Securities entails investments of several hundred million euros, not only for the Eurosystem but also for market participants across Europe. It is in all our interests to ensure that the numerous advantages offered by T2S actually become a reality. Preparations for T2S can't wait any longer. Our conference showed that the German market views T2S as an opportunity. As the largest central securities depository in Europe, we believe it is our responsibility to continue to offer the market - in Germany and beyond - the right services for a world with T2S."

One key question currently preoccupying the market is that of the costs associated with T2S. These include adaptation costs, as well as the actual settlement fees when T2S goes live. In another survey, 23.6 percent of German market participants said that they were "well informed" as regards T2S pricing. Despite being well informed, 51.7 percent of participants wanted "more details" while 24.7 percent said the information they had been given was "less than expected". Clearstream is the only central securities depository to sign up to T2S thus far and publish its fee structure for T2S. Clearstream has committed itself to passing on the ECB's settlement fees to its customers without adding a margin.

More than 130 representatives from the German banking and finance industry as well as securities settlement experts attended the Clearstream conference on TARGET2-Securities in Frankfurt on 26 June 2013. The event forms part of the "Shaping the Future" roadshow being staged by Clearstream, not only in Frankfurt but also in Brussels, Dublin, London, Luxembourg, Madrid, Milan, Paris, Vienna and Zurich. The aim of this series of events is to inform participants of current developments and also to use the opportunity afforded by this direct exchange with the market to fine-tune the Clearstream offer.

Comments: (0)